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The Dango Tango: Why Corruption Blocks Real Reform in Japan

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  • Black, William K.

Abstract

Japan’s economy has stagnated since the bursting of the twin real estate and stock bubbles in 1990. Construction employment rose after the bubbles burst despite a real estate glut.Systemic corruption is delaying recovery. The key is the dango—Japan’s system of bid rigging, which is pervasive in public construction. The firms rotate who will win the “competitive†bid. The bureaucrats leak the highest price bid that will be accepted in return for favors from the industry and lucrative sinecures when they retire (amakudari—†descent from heaven†). The ruling politicians (the “construction tribes†) get kickbacks and ensure the adoption of enormous public construction programs.The result is that Japanese public and private capital flows are corruptly routed to uses that are not simply inefficient, but outright harmful to society. Pervasive corruption is the primary obstacle to Japanese economic (and environmental) health and political reform.

Suggested Citation

  • Black, William K., 2004. "The Dango Tango: Why Corruption Blocks Real Reform in Japan," Business Ethics Quarterly, Cambridge University Press, vol. 14(4), pages 603-623, October.
    • Handle: RePEc:cup:buetqu:v:14:y:2004:i:04:p:603-623_00
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    Cited by:

    1. Nakanishi, Yoshinobu, 2022. "Determinants of the number of bidders and win-reserve ratio in open competitive tendering: Relationship-specific investments and incomplete contracts," Japan and the World Economy, Elsevier, vol. 63(C).
    2. Shane Leong & James Hazelton & Cynthia Townley, 2013. "Managing the Risks of Corporate Political Donations: A Utilitarian Perspective," Journal of Business Ethics, Springer, vol. 118(2), pages 429-445, December.
    3. John Tsalikis & Bruce Seaton, 2008. "The International Business Ethics Index: Japan," Journal of Business Ethics, Springer, vol. 80(2), pages 379-385, June.

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